The Supreme Court has confirmed in which cases the director of a limited company (SL) is personally liable, with their own assets, for the company's debts, and the news directly affects the thousands of self-employed individuals who, after growing, decided to run their business through a limited company and still serve as its directors.
What exactly did the Supreme Court say?
Ruling 1477/2026 resolves the case of a company that took years to correct its negative equity imbalance.
The debt claimed, amounting to €42,000, had arisen in May 2016. The director argued that he was not aware of it until he received the lawsuit, in December 2019. That was no excuse.
The Supreme Court has made it clear that being unaware of a specific debt does not open a new deadline for action. And that correcting losses late does not erase the liability already incurred while the breach lasted.
In which cases is the director of an SL liable for the company's debts?
Here is the key point you need to understand if you manage your own SL. Article 367 of the Ley de Sociedades de Capital (Spanish Companies Act) requires action when the company's net assets fall below half of the share capital: this is a legal cause for dissolution.
From the moment the director becomes aware (or should be aware) of this situation, they have two months to call a shareholders' meeting. If the meeting does not adopt measures, they have a further two months to request judicial dissolution.
Failing to act within these deadlines is exactly what makes the director of an SL liable for the company's debts with their own assets: not all of them, but only those arising during the period in which they failed to meet that obligation.
Since when does it apply and who does it affect?
It is not a new law with an entry-into-force date: it is case law, and as such it now sets how lower courts must rule from now on. There is no need to wait for any publication in the BOE.
It mainly affects company directors who are self-employed: people who run their activity through an SL and are, at the same time, directors of that company. If you delegate day-to-day management, be careful: delegating the accounting does not free you from this liability.
What to do if you manage your own SL
If you see yourself in this situation, it is advisable to act now on several fronts, before a loss turns into a personal problem:
Review your balance sheets periodically and detect as early as possible any accumulated losses, asset impairments or debts that could push net assets below half of the share capital.
If you reach that situation, formally convene the shareholders within the following two months, leaving reliable proof of the notice (registered mail, notarial record).
If the shareholders do not contribute capital or adopt measures, request judicial dissolution within the two months following the meeting.
Document the entire process: accounting reports, notices and resolutions. Ask your advisor for an express alert when net assets approach the threshold.
Remember that a shareholder loan, on its own, does not restore net assets if it is not documented as a genuine contribution.
In short, the ruling confirms that the liability of the director of an SL is not automatic, but neither is it avoided by looking the other way: it depends on having acted within the deadline from the moment the company enters serious losses.
In summary: the director of an SL is liable for the company's debts
Many self-employed individuals who at the time considered moving from being self-employed to a limited company did so thinking that this would protect their personal assets one hundred percent.
This ruling is a reminder that this protection has very specific limits, and that the director of an SL may be liable for the company's debts precisely when it matters most to avoid it.